Hello Sir,

Hope you are doing well.

Recently, we came across Maharashtra Seamless Ltd. It’s one of the largest makers of seamless pipes in India which primarily get used in oil & gas sector.

On the first look, the numbers for the company look interesting with good growth since FY 16.

The valuations also look low and what’s interesting is that Promoters have been increasing their stake in the company. Recently promoters bought 1,25,000 shares at around 950.

To understand the company better, we have shared notes from the Q3 FY 24 con-call of the company:


Before that, a few days back, we released our new stock recommendation for our Alpha and Alpha + Members

Company’s main growth and profit driving segment has grown more than 10x in terms of sales and profit in the last 10 years. We believe it has the potential to double its PAT in the next 3 yrs

For details on the stock click HERE


Maharashtra Seamless – Notes from Q3 FY 24 con-call

  • In Q3 FY ’24, we have improved upon our margins and have achieved highest EBITDA following strong execution of orders and better marketing initiatives
  • On a YOY basis, our revenue in Q3 FY ’24 increased by 8%, EBITDA increased by 51%, PAT increased by 67%

– Margins

  • Generally speaking, our margins have ranged from INR 9,000 per ton to INR 30,000 per ton
  • The main reason for increase in EBITDA per ton is the good domestic market that is currently in place
  • Another point was that the raw material price has declined. So our order prices were good, but the raw material price has declined

– Order book

  • Order book as on 26th January 2024 stands at INR 1,563 crores, which is a good level. We expect margins to remain steady based on current trend of seamless pipe prices
  • Our exposure to oil and gas sector is around 70%. The other segments that we cater to are boiler segment and general engineering

– Export

  • Exports are less than 10% of total revenue. Whilst export demand has not picked up over the past 9 months it has not had a meaningful impact on the company because the domestic demand is very good

– Industry

  • Our seamless pipes market remains buoyant, driven by capital expenditure and spending in oil and gas sector as we have seen our order book being replenished and maintained at good level
  • ONGC has made significant natural gas discoveries in the Mahanadi basin
  • New oil blocks, Amrit and Moonga, have also been recently discovered in Mumbai offshore
  • Oil companies are drilling additional wells as E&P activities have increased
  • We expect fresh tenders for drill pipes in FY ’25 as domestic market size is around 10,000 tons
  • Antidumping duty is in place till October 2026. We expect the duty to continue going forward


  • We have commenced our plans of capital expenditure by acquisition of land for installation of finishing facilities at our Telangana unit in previous quarter
  • We currently have production capacity of 1 lakh tons, which is inactive at the Telangana unit. In order to utilize that production capacity of 1 lakh tons, we are putting in a finishing line at the Telangana unit
  • We expect this installation to be completed by December ’24

– Balance sheet

  • We are a 100% debt-free company. We currently have liquid investments of almost INR1,500 crores

– Guidance

  • Volume – It will be as it has been in FY ’24 for ERW. For Seamless, it is a function of how quickly the Telangana finishing line will be in place
  • Our seamless EBITDA was INR 30,000. So it’s difficult to maintain INR 30,000. In next year, we will be aiming at INR 20,000, not INR 30,000. INR 30,000 is quite high EBITDA



Disclaimer: This is not a recommendation to buy/sell Maharashtra Seamless. The securities quoted are for illustration only and are not recommendatory.


Best Regards,

Ekansh Mittal
Research Analyst
Web: https://www.katalystwealth.com/


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